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July 11, 2019 1

Electric Vehicle Battleground

The big auto war is coming !

When we consider electric vehicles, some of us forget that this has really only been a serious journey for four years. For investors in the space it probably feels longer, while many governments seem to have only recently grasped the concept. Then there’s the, “average Joe”, who heard a few comments and thinks that might be a cool idea for the future.

The truth is that there is a vehicle war looming beyond what many can imagine and that includes the most optimistic. However, it’s much more than that. This will be a full-blown technology war on a massive scale.

It’s now just about vehicles. It’s about a total change to the way vehicles are constructed and the associated technologies they require. Much more than a few pistons, gears and body panels. This is about batteries, electric motors, computerization, composite materials, and electronics on a scale never seen before.
The world’s big auto has been dragged out of a comfortable slumber and thrown headlong into the biggest change since Henry Ford first replaced the horse and cart. It will be closely followed by the second revolution in robotics that will encompass everything from warfare to automation and beyond. Anything you can’t connect and drag a power cable is fair game for this revolution.

In any war we should fist examine the players. When we think of vehicles those players consist of Asia, Europe and America along with a few other less influential markets. So let’s take a look at those major auto markets and how prepared for war they are.

U.S.A

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USA

Let’s look at the U.S first. After all, Elon Musk and Tesla first pushed electric vehicles into the spotlight. There is little doubt that Tesla remains the world leader for EV technology despite some of the negative comments motoring around the investment world. A world leader with challenges ahead as they cope with huge debt. Indeed, watching from the outside it would seem that Tesla is the only soldier in the U.S arsenal right now. Others plan to join the fight but I consider it much like a partisan army fighting in occupied territory.

Without government backing they are fighting the good fight and I certainly hope they win. What I don’t understand is why the leaders in the U.S are at war and yet behave like they didn’t hear the declaration. I mean the U.S is the epicentre of technology, but it feels like they haven’t yet grasped what’s happening. They have almost zero raw materials for batteries and the lone ranger in Tesla fighting their battles, with the odd Tonto trying to help as best they can.

Without serious government support for Tesla, the U.S feels a good five years behind the game, and that assumes they can lock up the raw material supplies and fast track the additional gigafactories while kicking a non-compliant gas guzzling industry into action.

Europe

Illustration of european union flag Free Vector
Europe

I think to understand Europe we almost need to understand the industry as a whole. They have a very lucrative auto industry and they produce some of the best ICE vehicles in the world. People buy them just as they have for decades. They bring out a new model every few years, hone their wonderful engineering skills and all is well.

When the world started talking about electric vehicles, they gave a shrug and thought that may be worth playing with.

When fuel cells seemed to go off track they began to embrace Hybrids. That seemed like a more palatable solution whereby they keep their ICE technology dominance and add a few batteries to keep the ball rolling and placate those calling for change. However, it will not take long for consumers to realize that running two technologies in one vehicle may be great for big auto but not for the little guy.

Finally in the past year the penny has dropped, and the ICE RPM’s have begun to falter. Led mostly by VW Group Europe has finally accepted the inevitable and kicked into action. The multi thronged attack of emissions compliance, consumer demand and playing the China game has hit the spot. Europe will be formidable as they get their act together and from a few years behind may well catch the leaders sooner than we think

China

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China

Well, yes…we could say Asia. However, Japan has played the wrong game and frankly looks to be a loser unless they can quickly forge new partnerships. They played the fuel cell game and lost in my opinion. With a few exceptions, they have lost the passion for innovation that made them great and are now plagued by a traditional management mindset. I feel they will be the biggest losers unless they can quickly form alliances with the winners.

Korea thwarted China’s first attempt at ICE exports but have fallen well behind the Asian game and are struggling to emerge as a winner. We could consider them as a small Europe in the EV game.

China is of course the driving force behind electric vehicles, and we should all applaud their efforts. They have the cleverest government in the world simply because they can swiftly orchestrate their plans and implement changes the next day. We’ll provide a further article on China at some time as we can’t possibly cover the past. present and future here.

Suffice to say that we believe China will control the supply chain for battery cells, power management, electronics and motors. In addition, they will hope to finally gain the export markets for their auto manufacturers that previously failed under the ICE model.

In Conclusion

In conclusion. China will be big winners and the might of European engineering will soon be snapping at their heels. Tesla will continue to fly the American flag and perhaps form alliances with the other U.S laggards.

ICE sales are falling around the world while electric vehicle demand is growing faster than supply. Perhaps those lost ICE sales are waiting in the wings for the future that’s inevitable?

END.



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